Court Might Enforce A Contract Ban On Consumer Reviews (Forbes Cross-Post)
Two different renters, the Johnstons and Bowdens, rented the Gallands’ apartment and subsequently posted critical reviews on VRBO. Mr. Galland allegedly offered $300–unsuccessfully–to the Bowdens to remove their post. Instead, the Gallands sued the Johnstons and Bowdens for defamation, breach of contract and other claims.
The judge dismissed the defamation claims–but refused to dismiss the breach of contract claim because:
It is plausible that Defendants made the posts in violation of the contract. Moreover, it is plausible that such negative reviews could cause injuries to the Gallands’ business. Nevertheless, these are questions for a trier of fact to decide…
Thus, the breach of contract claim will go to a trial to decide if the reviews violated the contract.
Surprisingly, the judge didn’t discuss the illegality of the contract clause. In 2003, a New York court instructed a software vendor to stop banning consumer reviews in its contract (the exact restriction: “The customer will not publish reviews of this product without prior consent from Network Associates, Inc.”). The court held that using such a clause may be a deceptive practice under New York’s consumer protection law. I can’t see any reason why the Gallands’ clause wouldn’t violate the same law. (The Gallands’ case is being litigated in a New York federal court applying New York law). Irrespective of the New York law, the contract restriction should be void as a matter of public policy. I’m hoping the court will come to its senses and realize that no trial is needed because the clause should be condemned, not enforced.
It’s remarkable that anyone had the confidence to litigate such a clause at all. We have seen relatively few courtroom battles over contractual bans on consumer reviews, and we aren’t likely to see many such disputes in the future. The Gallands’ contract provision clearly violates California’s new law against consumer review bans, and I believe a new federal bill will be introduced to make such bans nationwide. Eventually vendors will get the message and stop trying. Until they do, we need more tools to discourage such clauses in the future–and to discourage wasteful litigation intended to suppress renters’ rights to express themselves.
For more on this topic, see my article, The Regulation of Reputational Information.
Case citation: Galland v. Johnston, 2015 WL 1290775 (SDNY March 19, 2015)
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